BRASILIA, Brazil _ Brazilian President Michel Temer has secured enough votes in an ongoing lower house session to avoid being put on trial for corruption, paving the way for him to cling to power until his term ends in December 2018.
The president has already obtained the votes to make it mathematically impossible for the opposition to reach the two-thirds majority it needs to put him on trial and force him to step down. An official victory once voting is concluded would allow Temer to draw a line under a five-month-long corruption scandal, during which he has survived two lower house votes that could have suspended him from the presidency.
Investors are closely watching the margin of victory for signs the government still has the strength to deliver at least some of its plans for economic reform. A shakeup of the pension system, a simplification of the tax code and a downsizing in the size of the state are among some of Temer's ambitions for his last 14 months in office, but all of these measures will face resistance. Wednesday's proceedings revealed further signs of growing discontent among the president's congressional support base.
"The result will be key to find out the size of the coalition and what we'll be able to vote," said Beto Mansur, the government's deputy leader in the lower house, ahead of the vote. "Tax reform is doable," he added, without ruling out chances of success elsewhere.
After rallying to record highs earlier in the month the Sao Paulo stock exchange has leveled off in recent weeks, while the currency has eased in line with other major currencies against the U.S. dollar. Many investors have downscaled their expectations of an aggressive reform agenda going forward.
"The consensus is that the president will get fewer votes in his favor, underpinning a division in Congress that could make it more difficult to stir the economic recovery during the electoral process," Emy Shayo, a Brazil equity strategist, and others from JP Morgan wrote Tuesday in a research note to clients.
As a result, any vote above 257, or 50 percent of the total number of deputies, in favor of Temer would be seen as a positive, according to the bank's analysts. In August, 263 lawmakers voted to shelve the charges against him.
Earlier Wednesday opposition legislators protested outside the plenary while defense lawyers, prosecutors and legislators debated the charges. Many members of the ruling coalition were hesitant to show open support for Temer, meaning that it took the government around seven hours to reach a quorum.
"This is what happens when the government doesn't do what it promised," said Paulo Pereira da Silva, a lawmaker from the Solidariedade party, before the vote. "Many deputies were left waiting for budgetary resources for their cities and this wasn't done."
Adding to the drama ahead of the vote, the 77-year-old president was hospitalized over a urological blockage, prompting the Bovespa stock exchange to plummet briefly. It quickly recovered and Temer was discharged a few hours later.
Earlier in October Temer was diagnosed with a slight obstruction in one of his coronary vessels, according to an official at the presidential palace who also requested not to be identified.
Darcisio Perondi, the deputy leader of the government in the lower house, told Bloomberg that the president had been sedated due to the painful nature of the procedure. "I hope he takes a few days' rest," he said.
